By JENNIFER A. DLOUHY Times Union Washington bureau

Published 2:02 am, Friday, July 2, 2010

WASHINGTON, D.C. — Democratic Sen. Kirsten Gillibrand's decision Monday to reject a Senate plan to deny federal housing dollars to a controversial community organizing group has put her in the crosshairs of conservatives.

Conservative activists have long been critical of the group, accusing it of voter registration fraud during last year's presidential campaign and questioning its role assisting the Census Bureau. But that anger exploded after the recent release of undercover videos that show ACORN employees counseling people posing as a pimp and a prostitute on how to secure a small-business loan by concealing their purported intent to set up a brothel, pay workers under the table and evade taxes.

The Census Bureau severed its ties with ACORN last week.

"At a time when the government is facing a record deficit and New York is still struggling to get its economy back on track, Sen. Gillibrand's vote tonight is stunning," National Republican Senatorial Committee spokesman Brian Walsh said in a statement released after the Senate vote had concluded. "Even an outspoken liberal like Sen. Schumer voted against ACORN, so why did Kirsten Gillibrand vote to protect them? New York's appointed Senator owes every New York taxpayer a thorough explanation."

State Republican leaders have added their voices to the protest. On Tuesday, Senate Minority Leader Dean Skelos released a letter he sent to Attorney General Andrew Cuomo and Comptroller Tom DiNapoli to stop any state money — or federal money earmarked for the state — from going to ACORN or its sibling organization, the New York Agency for Community Affairs. On Wednesday, Binghamton Republican Sen. Tom Libous said he would introduce legislation to prevent any of the money allocated for a "Green Jobs" bill that passed the Senate last week from going to either group.

Gillibrand has defended her vote, saying the group does good work that should continue, despite the bad actions of a few employees.

"While Sen. Gillibrand finds the actions of certain ACORN employees to be reprehensible and will ask ACORN leaders for a full investigation and plan to prevent any further abuse, the truth remains that thousands of New York families who are facing foreclosure depend on charitable organizations like ACORN for assistance," said Bethany Lesser, a spokesman for Gillibrand. "Sen. Gillibrand believes that eliminating funding for the important programs that ACORN provides would be harmful to the thousands of hard-working New Yorkers who need extra assistance in the middle of this economic crisis."

Although Gillibrand's vote exposes her to fierce criticism from conservatives, it could bolster her support among some liberals in New York City, where ACORN is active. Since January, when New York Gov. David Paterson appointed Gillibrand to the Senate seat formerly held by Secretary of State Hillary Clinton, she has been working to buff up her image with liberals critical of some of the political stances she took while representing the 20th Congressional District — the largely rural region stretching from north of Poughkeepsie up to Lake Placid — in the U.S. House of Representatives.

Gillibrand, who will face voters next year in an election to keep the Senate seat, was endorsed by ACORN's political action committee earlier this year.

Similarly, Schumer's vote to deny low-income housing assistance funds to ACORN could help him with upstate moderates and conservatives during his reelection contest.

Monday's Senate vote came on an amendment to a must-pass spending bill that would fund the Housing and Urban Development Department and other government programs. It would specifically bar ACORN from getting any funding doled out by the spending bill. According to the sponsor of the amendment, Sen. Mike Johanns, R-Neb., ACORN has received $53 million in federal funds since 1994.

Early this afternoon, ACORN released a statement from its CEO Bertha Lewis, who acknowledged that the most recent video and earlier releases depicting similarly questionable activities at offices in other cities have "deeply disturbed" the organization's leadership.

Lewis said the organization was instituting immediate policy changes including a stop to all new intakes for its service programs, in-service training for frontline staff, and the appointment of an independent auditor to look into the scandal.

" ... We will go to whatever lengths necessary to reestablish the public trust," Lewis said.